MIND will receive $348,000 over four years to fund a full-time mental health support worker to work directly with the proposed Traralgon facility's six tenants, Mental Health Minister Mary Wooldridge announced this week.

The State Government is expected to provide a further $450,000, from the Department of Housing, to fund the remainder of the capital works.

Barrier Breakers will provide advocacy for tenants, MIND will provide mental health support and Eastcoast Housing Association will help build and manage the tenancies.

The joint project will be the first of its kind in Gippsland.

Derek Amos, Barrier Breakers chief executive, says the supported accommodation model bridges the gap between institutional care and the current services provided by under resourced hospitals.

He says the impact of closing the Hobson Park Mental Hospital in the early 1990s was never addressed by the State Government.

"It covers the case of the revolving door syndrome and being treated in acute care, returned to rough accommodation, couch surfing or a caravan, and then because of those pressures having another episode ill-health and returning to hospital."

Eastcoast Housing Association will also provide $600,000 to build and manage the facility, and Barrier Breakers hope to raise $150,000.

Rob, who works as a mental health advocate and lives with a mental illness, says the benefits of a joint housing and support project for people with mental illness will be enormous.

"People who suffer from mental illness are often left with nothing, so to have a secure home with a housing association that understands, support from MIND and advocacy makes it possible to actually build and improve your mental health."

Barrier Breakers will host a black-tie fundraising event on 31 August at Century Inn, Traralgon.